Loonie Steadies against US Dollar after Losing Ground

Earlier, the Canadian dollar lost ground against the US dollar, hitting a one-week low. However, the loonie has since steadied and is now gaining ground. Better news out of the United States and higher commodity prices are helping the Canadian dollar today.

Risk appetite is pushing for recognition today as the situation in the United States gets a little more hopeful. House Speaker John Boehner indicated yesterday that he is willing to budge a little on taxes in order to come to a fiscal cliff agreement. That news, combined with some good news from last week, is helping to give risk appetite a slight boost.
Loonie is being supported by that risk appetite, and is getting help from higher commodities. Indeed, oil prices have inched above $87 a barrel, and that is quite helpful to the Canadian dollar, supporting the currency. There is even speculation that, next year, as the loonie’s reserve currency status becomes official, it might be seen as a safe haven. Since the 2008 financial crisis, the Canadian dollar has performed strongly, and has managed to remain around parity with the US dollar.
At 14:00 GMT USD/CAD is down to 0.9851 from the open at 0.9863. GBP/CAD is up to 1.5952 from the open at 1.5946. EUR/CAD is down to 1.2956 from the open at 1.2976.

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